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No Standing to Invalidate Trademark without Threat of Infringement Suit

By on Feb 23, 2023
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The US Court of Appeals for the Ninth Circuit concluded that when a party obtains a declaratory relief finding that it does not infringe a trademark, it no longer has Article III standing to pursue invalidation of the mark. San Diego County Credit Union v. Citizens Equity First Credit Union, Case Nos. 21-55642; -55662; -56095; -56389 (9th Cir. Feb. 10, 2023) (Bea, Ikuta, Christen, JJ.)

Citizens Equity First Credit Union (CEFCU) registered a trademark for the term “CEFCU. NOT A BANK. BETTER,” and further claimed to own a nearly identical common-law trademark for “NOT A BANK. BETTER.” In 2014, San Diego County Credit Union (SDCCU) obtained a registration for “IT’S NOT BIG BANK BANKING. IT’S BETTER.” CEFCU petitioned the Trademark Trial & Appeal Board to cancel SDCCU’s registration, claiming that it covered a mark that was confusingly similar to CEFCU’s registered and alleged common-law marks.

SDCCU sought declaratory relief in the district court seeking a noninfringement finding of CEFCU’s registered and common-law marks, an invalidity finding of CEFCU’s registered and common-law marks, and a finding that CEFCU falsely or fraudulently registered its mark. CEFCU unsuccessfully filed motions to dismiss for lack of personal and subject matter jurisdiction. SDCCU persuaded the district court that during the course of the cancellation proceedings, it became apprehensive that CEFCU would sue SDCCU for trademark infringement. The district court granted SDCCU’s motion for summary judgment on noninfringement and CEFCU’s motion for summary judgment on SDCCU’s fraudulent registration claim. The parties agreed to dismiss the claim that CEFCU’s registered mark was invalid. The only issue remaining was SDCCU’s count seeking declaratory relief to invalidate CEFCU’s common-law mark. After a bench trial, the district court determined that CEFCU’s common-law mark was invalid, entered final judgment and awarded SDCCU attorneys’ fees. CEFCU appealed.

In an appeal that raised a “bevy of issues,” the Ninth Circuit concluded that the district court lacked Article III jurisdiction to invalidate CEFCU’s common-law mark following the grant of summary judgment in favor of SDCCU on its noninfringement claims. Citing the Supreme Court’s 2007 decision in MedImmune v. Genentech and Ninth Circuit precedent, the Ninth Circuit applied the “reasonable apprehension” test to determine whether a controversy exists in a declaratory judgment action regarding trademark infringement. Under this test, a party has standing to seek declaratory relief of noninfringement if the party demonstrates “a real and reasonable apprehension that [the party] will be subject to liability” if the party’s course of conduct continues. Concrete threats of a trademark infringement suit are not required to create live controversy to provide standing to seek declaratory relief action.

The Ninth Circuit concluded that justiciable controversy existed at the pleading stage, pointing to CEFCU’s cancellation petition, CEFCU’s testimony that it was just a “matter of time” before actual confusion occurred in California, and CEFCU’s affirmative refusal to stipulate that SDCCU was not infringing CEFCU’s marks. However, once the district court rendered its declaratory judgment of noninfringement, the record lacked any evidence that an ongoing threat of liability was causing [...]

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Ninth Circuit Extends § 230 Immunity to Domain Name Registrars

By on Feb 16, 2023
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The US Court of Appeals for the Ninth Circuit affirmed a district court’s dismissal of the plaintiff’s suit against a domain name registrar, holding that the plaintiff did not adequately allege that the registrar used the disputed trademark “in commerce” as required by the Lanham Act. The Court also extended immunity under the Communications Decency Act to include domain name registrars. Rigsby v. GoDaddy Inc. et al., Case No. 21-16182 (9th Cir. Feb. 3, 2023) (Clifton, McKeown, Thomas, JJ.).

Scott Rigsby, the first double leg amputee to complete an IRONMAN triathlon and founder of the Scott Rigsby Foundation (a nonprofit for wounded veterans and disabled persons), registered the domain name “scottrigsbyfoundation.org” with GoDaddy.com in 2007. GoDaddy is the world’s largest domain name registrar. When Rigsby failed to renew the domain name in 2018 because of a billing glitch, a third party registered the domain name and changed the content to an online gambling site. Rigsby filed suit against GoDaddy in the US District Court for the Northern District of Georgia, seeking declaratory judgment and alleging Lanham Act and state law claims. The suit was transferred to the US District Court for the District of Arizona pursuant to the forum selection clause in GoDaddy’s terms of service. The district court dismissed all claims with prejudice. Rigsby appealed, challenging dismissal and transfer of venue.

The Ninth Circuit affirmed dismissal. As an initial matter, the Court determined that it lacked jurisdiction to review the transfer order because the transferor fell within the Eleventh Circuit.

Turning to the Lanham Act claims under 15 U.S.C. § 1125(a), Rigsby alleged that GoDaddy knowingly provided use of the domain name in a deceptive manner. The Ninth Circuit rejected this argument for two reasons. First, § 1125(a) has a use in commerce requirement, and GoDaddy simply granted the third-party gambling site access to the domain name. The Court held that the third party’s use in commerce does not subject the registrar to liability for trademark infringement or unfair competition. Second, as a domain name registrar that did not engage in activities other than registration, GoDaddy is shielded from liability for cybersquatting under the Anticybersquatting Consumer Protection Act (ACPA). Importantly, the Court held that the plaintiff did not prove that GoDaddy registered, used or trafficked the domain name with a bad-faith intent to profit—a registrar’s lack of intervention with an infringing third-party use is not equivalent to use in commerce or active promotion of infringement.

The Ninth Circuit also barred Rigsby’s state law claims and related injunctive relief, explaining that GoDaddy is entitled to statutory immunity under Section 230 of the Communications Decency Act (CDA). (See § 230(c)(1) (“[n]o provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider”).) The Court identified three reasons why GoDaddy qualifies for CDA immunity. First, the Ninth Circuit joined the Second Circuit in ruling that domain name registrars and website hosting companies qualify as interactive computer services because [...]

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Your Gang Did What!? No Matter—No Forfeiture of IP

By on Jan 26, 2023
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In a unique case blending intellectual property and criminal law, the US Court of Appeals for the Ninth Circuit agreed that a district court properly exercised jurisdiction over a motorcycle club and upheld the lower court’s finding that the club did not have to forfeit its collective membership marks. United States v. Mongol Nation, Case Nos. 19-50176; -50190 (9th Cir. Jan. 6, 2023) (Ikuta, Forrest, Thomas, JJ.)

Mongol Nation is an unincorporated association comprised of Mongols Gang members and, per the district court, is “a violent, drug trafficking organization.” After a jury found Mongol Nation guilty of both substantive and conspiracy violations of the Racketeer Influenced and Corrupt Organizations (RICO) Act, the US government sought forfeiture of Mongol Nation’s rights in its collective membership marks—a category of “intellectual property used to designate membership in an association or other organization”—and specific property displaying those marks. A jury granted both forfeiture requests, but the district court granted forfeiture only of specific tangible property, not the marks themselves. The district court cited the First and Eighth Amendments: The First protected Mongol members’ rights to display their marks, and the Eighth prohibited the disproportionate remedy of forfeiture of marks that have “immense tangible” value to Mongol members. The government then filed another forfeiture application proposing that Mongol Nation forfeit its exclusive rights in the marks, meaning that Mongol Nation could not prevent others from using them, even in commerce, but that they would not transfer to or vest in the United States. The district court again denied this motion on First and Eighth Amendment grounds.

Both parties appealed, presenting two issues to the Ninth Circuit. Mongol Nation challenged the district court’s jurisdiction to hear the case because Mongol Nation is not a “person” under RICO. The government challenged the district court’s denial of forfeiture of the marks.

The Ninth Circuit summarily dealt with the first issue, noting that Mongol Nation did not properly raise this argument at the district court. The Court was not persuaded by Mongol Nation’s three-part argument that RICO defines an entity to be a “person” only if the entity has a legal interest in property, California only allows unincorporated associations to hold property if the association has a “lawful” purpose, and the indictment describes Mongol Nation as existing for an “unlawful purpose.” The Court found that the association misstated the indictment allegations, which said Mongol Nation’s purposes were “not limited to” the enumerated unlawful ones. Thus, because this argument was not properly preserved and because the RICO “person” definition did in fact encompass Mongol Nation, the Court found that the district court properly exercised jurisdiction.

The Ninth Circuit also affirmed the district court on the forfeiture issue, albeit for different reasons. Without reaching the district court’s First or Eighth Amendment logic, the Ninth Circuit stated that “RICO’s plain text” made the government’s forfeiture request “a legal impossibility.” The Court explained that, following a criminal conviction, a statute must enable property forfeiture. RICO does have such a penalty provision that encompasses [...]

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Court Uncorks New Way to Serve Trademark Complaints

By on Nov 29, 2022
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The US Court of Appeals for the Ninth Circuit concluded that Section 1051(e) of the Lanham Act permits a plaintiff in a district court case to serve a complaint against a foreign defendant via the Director of the US Patent & Trademark Office (PTO). San Antonio Winery, Inc. v. Jiaxing Micarose Trade Co., Ltd., Case No. 21-56036 (9th Cir. Nov. 14, 2022) (Siler, Callahan, Thomas, JJ.)

San Antonio Winery is a Los Angeles-based winery best known for its Stella Rosa brand of wines. The winery is owned and operated by the Riboli family. San Antonio has registered the trademarks RIBOLI and RIBOLI FAMILY, which it has used since at least 1998 to market its wines and other products.

Jiaxing is a Chinese company that has sold products using the Riboli name. In 2018, Jiaxing registered the mark RIBOLI for use in connection with articles of clothing and shoes. In 2020, Jiaxing applied to register the mark RIBOLI for use with additional types of products, including wine pourers, bottle stands, containers, cocktail shakers, dishware and various other kitchen and household items.

After learning that Jiaxing was using the Riboli name to sell products in the United States, San Antonio filed a complaint asserting Lanham Act claims for trademark infringement, trademark dilution and false designation of origin, as well as related state-law claims. San Antonio also sought an injunction prohibiting Jiaxing from using the RIBOLI mark in connection with its products, an order canceling Jiaxing’s 2018 registration of the RIBOLI mark, and an order either directing Jiaxing to abandon its 2020 application to register RIBOLI for additional uses or prohibiting the PTO from granting the application.

Because Jiaxing is a Chinese company, San Antonio’s service of process was governed by rules for serving parties abroad, such as by the Hague Convention. Concerned with the amount of time it might take to effect service under the Hague Convention, San Antonio instead sought to serve Jiaxing under Section 1051(e) of the Lanham Act, which applies to foreign domiciliaries who apply to register a trademark. Section 1051(e) states that if a trademark applicant is not domiciled in the United States, the applicant may designate the name and address of a person in the United States who may be served with notices or processes in proceedings affecting the mark. If the designated person cannot be found at the address, the notices or processes may be served on the PTO Director.

Seeking to avail itself of Section 1051(e), San Antonio inquired whether the US-based lawyer who had represented Jiaxing in connection with its trademark applications would accept service on Jiaxing’s behalf. When the lawyer did not respond, San Antonio served the district court complaint on the PTO Director, who then sent a letter to Jiaxing confirming service of process was effectuated pursuant to Section 1051(e).

After Jiaxing did not appear to defend itself in the action, San Antonio filed a motion for default judgment. The district court denied the motion on the ground that Jiaxing had not [...]

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First Amendment Punches Out Alleged Lanham Act Violation

By on Nov 29, 2022
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Addressing the balance between trademark rights under the Lanham Act and the First Amendment right to protected expression, the US Court of Appeals for the Ninth Circuit affirmed a district court judgment finding that the defendant’s use of the term “Punchbowl” was not a Lanham Act violation because it was expressive and not misleading as to its source. Punchbowl, Inc. v. AJ Press, LLC, Case No. 21-55881 (9th Cir. Nov. 14, 2022) (Ownes, Bress, Fitzwater, JJ.)

Punchbowl is an online communications company that provides “online events and celebration invitations and greeting cards” as part of its subscription-based service. Punchbowl has used the mark Punchbowl® since 2006 and the mark was registered with the US Patent & Trademark Office in 2013. Punchbowl describes itself as “The Gold Standard in Online Invitations & Greeting Cards,” and uses the logo of a punch bowl ladle:

Punchbowl filed suit claiming that AJ Press infringed on Punchbowl’s mark through its subscription-based online news publication Punchbowl News. Punchbowl News covers “insider” political topics and reports on events in Washington, DC, and derives its name from the use of the term “punchbowl” by the Secret Service to refer to the US Capitol building. As such, the Punchbowl News logo comprises of an overturned image of the US Capitol filled with purple punch and the slogan “Power. People. Politics.”

AJ Press argued that its use of the term “Punchbowl” was protected under the First Amendment and did not violate the Lanham Act. The district court granted summary judgment to AJ Press, concluding that its use of the name “Punchbowl” did not give rise to liability because it constituted protected expression and was not explicitly misleading as to its source. Punchbowl appealed.

Traditionally, the likelihood of confusion test is used for claims brought under the Lanham Act. When artistic expression is at issue, however, that test fails to account for the full weight of the public’s interest in free expression. If the product involved is an expressive work, courts generally apply a gateway test, grounded in background First Amendment concerns, to determine whether the Lanham Act applies. One approach was set forth in the Second Circuit’s 1989 decision in Rogers v. Grimaldi to determine whether First Amendment concerns were strong enough to outweigh the need to protect a mark. The Rogers test requires the defendant to first “make a threshold legal showing that its allegedly infringing use is part of an expressive work protected by the First Amendment.” Once this threshold is satisfied, the Lanham Act will not apply unless the plaintiff can establish that “the defendant’s use of the mark (1) is not artistically relevant to the work or (2) explicitly misleads consumers as to the source or the content of the work.”

The [...]

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FDCA’s Exclusive Enforcement Provision Reigns Supreme over State Laws

By on Sep 29, 2022
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In its first occasion to interpret § 353b of the Federal Food, Drug, and Cosmetic Act (FDCA), the US Court of Appeals for the Ninth Circuit relied on the “implied preemption doctrine” to affirm a district court’s case dismissal for failure to state a claim under Fed. R. Civ. P. 12(b)(6). Nexus Pharmaceuticals, Inc. v. Central Admixture Pharmacy Services, Inc., Case No. 20-56227 (9th Cir. Sept. 13, 2022) (Kleinfeld, Nelson, VanDyke, JJ.)

Nexus developed and trademarked Emerphed, a US Food & Drug Administration (FDA) approved ready-to-use ephedrine sulfate in a vial. Central Admixture operates a network of compounding pharmacies and sells ephedrine sulfate in ready-to-use syringes without FDA approval, because compounding pharmacies do not need FDA approval. Compounding happens when ingredients in medicines are combined, mixed and altered for individual patients. Under 21 U.S.C. § 353b, drug compounding by “outsourcing facilities” is allowed without FDA approval, but the FDCA excludes compounded drugs that are “essentially a copy of one or more approved drugs.”

The FDCA contains an exclusive enforcement provision prohibiting private enforcement, stating that proceedings to enforce or restrain violations of the FDCA, which includes the compounding statute, must be by and in the name of the United States. To avoid the FDCA’s bar on private enforcement, Nexus alleged that Central Admixture violated the laws of several states in which it sells Emerphed, all of which prohibit the sale of drugs not approved by the FDA. Nexus argued that Central Admixture’s ephedrine sulfate was “essentially a copy” of Emerphed and therefore was excluded from the outsourcing facilities exception. The district court disagreed and dismissed the state law claims under the implied preemption doctrine. The district court explained that all of Nexus’s claims depended on the determination of whether Central Admixture’s ephedrine sulphate was “essentially a copy” of Emerphed, and that the “plain text of the [FDCA] left that determination in the first instance to the FDA and its enforcement process.” Nexus appealed.

The Ninth Circuit explained that the Supremacy Clause of the US Constitution is the “source of preemption doctrine, which invalidates state laws that are contrary to federal statutes,” but noted that there is no clear sorting of case law and no rigid formula to determine when state law runs contrary to federal law. Therefore, the Court relied on several controlling cases regarding the statute governing FDA approval of medical devices, not drugs. Medical device cases are distinguishable because the medical device statute includes an express preemption clause prohibiting states from imposing any safety or effectiveness requirement different from or in addition to those imposed by federal law. In explaining these cases, the Court noted that the claims that were allowed to go forward did not rely on noncompliance with FDA requirements (as Nexus did), but rather on traditional tort law duties. The purported violation of a state law that substantively says “comply with the FDCA” is not a traditional common law tort. The Court also explained that these cases taught that despite a presumption against implied preemption, [...]

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Ninth Circuit Provides Clarity on the Scope of Receiverships

By on Sep 22, 2022
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The US Court of Appeals for the Ninth Circuit affirmed an order denying the defendants’ motion to discharge a receiver who had been appointed to aid in the execution of a judgment for violations of the Copyright Act. WB Music Corp et al. v. Royce International Broadcasting Corp., Case No. 21-55264 (9th Cir. Aug. 31, 2022) (Tashima, Watford, Friedland, JJ.)

The receivership in this appeal arises from litigation that commenced in 2016 in the US District Court for the Central District of California by a cohort of music publishers for broadcasting the plaintiffs’ music on radio networks in violation of the Copyright Act. In 2017, the district court found the defendants jointly and severally liable for copyright infringement.

A jury awarded the plaintiffs statutory damages totaling $330,000 and the district court entered a judgment in that amount. The defendants continuously refused to satisfy the judgment, and after much litigation, the court entered an amended judgment for an additional $1.25 million and attorneys’ fees of more than $900,000.

The defendants’ only assets were their Federal Communications Commission (FCC) licenses. The district court ultimately appointed a receiver who was entrusted with “the power and authority to take charge of and manage [the defendants’] [r]adio stations’ assets, businesses, and affairs,” as well as the ability to solicit offers for the sale of the stations. The court’s order also provided that the receiver would incur a monthly fee and a commission on the sale of any of the radio stations.

The defendants moved ex parte for an order to compel the plaintiffs to accept payment of the amended judgment—asserting that they were prepared to wire funds in the amount sufficient to cover the amended judgment and post-judgment interest—but refused to agree to pay costs incurred by the plaintiffs’ post-judgment proceedings. Per the district court’s order, the defendants were to deposit with the court funds sufficient to satisfy the amended judgment. The order further provided that the receivership would not terminate unless the defendants paid all costs incurred post-judgment. The court entered a second amended judgment approximately four months later, which included additional unpaid sanctions and fees.

The defendants ultimately deposited the required funds with the district court; however, the funds were never released to the plaintiffs. The defendants then filed a motion to terminate the receivership and enjoin the sale of their radio stations on three grounds: (1) the receiver did not take an oath as required under California law; (2) the court lacked the discretion to refuse to terminate the receivership and (3) the court abused its discretion in denying the motion. The motion was opposed by the plaintiffs, who argued that the receivership should not be terminated without ensuring that the receiver was compensated for his services. The receiver opposed the motion, arguing that terminating the position would enable the defendants to “evade a range of liabilities” as there were still large creditors with outstanding judgment liens. The district court denied the defendants’ motion and the defendants appealed.

Agreeing with First Circuit [...]

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Nothing Private about Relator’s Qui Tam Action Info

By on Sep 22, 2022
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The US Court of Appeals for the Ninth Circuit reversed a district court’s order denying the defendants’ motion to dismiss a qui tam action under the False Claims Act (FCA) and remanded for further proceedings. U.S. ex rel Silbersher v. Allergan, Inc., Case No. 21-15420 (9th Cir. Aug. 25, 2022) (Gould, Bennett, Nelson, JJ)

Relator Silbersher, a patent lawyer, brought his action against the defendants under the FCA. (31 U.S.C. § 3730(b)). Silbersher alleged that the defendants unlawfully obtained several patents related to two drugs used to treat Alzheimer’s disease. He asserted that by fraudulently obtaining these patents, the defendants prevented generic drug competitors from entering the market. As a result, Medicare paid inflated prices for the two drugs in violation of the FCA.

The US Department of Justice, all of the states that have analogues to the federal qui tam provision and the District of Columbia declined to intervene in Silbersher’s action. Additionally, the key factual information in Silbersher’s complaint was all disclosed publicly and much of it could be found on the US Patent & Trademark Office’s (PTO) website as well as on other government websites. The district court denied the defendants’ motion to dismiss, holding that the public disclosure bar did not apply to Silbersher’s claims. The defendants appealed.

The Ninth Circuit reversed and remanded, noting that the “FCA creates civil liability for ‘any person who (A) knowingly presents, or causes to be presented, a false or fraudulent claim for payment or approval; [or] (B) knowingly makes, uses, or causes to be made or used, a false record or statement material to a false or fraudulent claim.’ 31 U.S.C. § 3729(a)(1).” The FCA limits who can bring a qui tam action and the sources of information upon which they can base their suit. The public disclosure bar seeks to strike a balance between encouraging suits by whistleblowers with genuinely valuable information and discouraging plaintiffs who have no significant information of their own to contribute. The Court, citing its 2018 case United States ex rel. Solis v. Millennium Pharms., reaffirmed the elements of the test for triggering the bar:

“(1) the disclosure at issue occurred through one of the channels specified in the statute;

 

(2) the disclosure was public; and

 

(3) the relator’s action is substantially the same as the allegation or transaction publicly disclosed.”

The Ninth Circuit determined that only the first element was at issue in this case and that “[i]t is salient and potentially controlling that the key factual information underlying Silbersher’s complaint was all publicly disclosed, and much could be found in websites maintained by the PTO and other government agencies.” Under the public disclosure bar, a court shall dismiss an action or claim if substantially the same allegations or transactions as alleged were publicly disclosed (1) in a federal criminal, civil or administrative hearing in which the government was a party; (2) in a congressional, Government Accountability Office, or other federal report, hearing, audit or investigation or (3) from the news [...]

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Foreign Video-Hosting Website Can’t Escape Long Arm of the Law

By on Sep 15, 2022
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Focusing on the first prong of the minimum contacts test (whether the foreign defendant purposefully directed its activities at the United States) the US Court of Appeals for the Ninth Circuit reversed a district court holding that it lacked specific personal jurisdiction over the operators of a Japanese-language video-hosting website and remanded the case for further analysis under Fed. R. Civ. P. 4(k)(2), the federal long-arm statute. Will Co. v. Lee, Case No. 21-35617 (9th Cir. Aug. 31, 2022) (Wardlaw, Gould, Bennett, JJ.)

Will is a Japanese adult entertainment producer with more than 50,000 videos registered with the US Copyright Office. Will sells access to its content on its website, where it makes more than $1 million per year from US consumers. Defendants Youhaha Marketing and Promotion (YMP) and Lee own and operate ThisAV.com, a Japanese-language video-hosting website similar to YouTube. ThisAV.com allows users to upload and view videos for free alongside advertisements posted by third-party vendors.

After discovering 13 of its videos on ThisAV.com, Will sent the defendants take-down notices pursuant to the Digital Millennium Copyright Act (DMCA). When the defendants failed to honor the takedown notices, Will sued for copyright infringement. The defendants moved to dismiss the lawsuit for lack of personal jurisdiction because Lee is a permanent resident of Hong Kong currently residing in Canada, and YMP is registered in Hong Kong (where it operates ThisAV.com). Will countered that the lower court had specific personal jurisdiction over the defendants because their display of the copyrighted videos was sufficiently connected to the United States. The district court granted the defendants’ motion to dismiss, concluding that the content on ThisAV.com was not “expressly aimed” at the United States, and that the defendants had not caused “jurisdictionally significant harm,” since only 4.6% of the site’s viewers were from the United States. Will appealed.

The principal issue on appeal was whether the defendants had “purposefully directed” the content of ThisAV.com at the United States under the minimum contacts Calder test, which asks whether the defendant (1) committed an intentional act (2) expressly aimed at the forum state, (3) causing harm that the defendant knows is likely to be suffered in the forum state.

The Ninth Circuit summarily concluded that YMP and Lee had committed intentional acts by operating ThisAV.com and purchasing the domain name and domain privacy services. However, whether Lee and YMP had “expressly aimed” ThisAV.com at the United States was a closer question. The Court noted that “mere passive operation of a website” is insufficient to show express aiming. Instead, the operator must have “appealed to and profited from an audience in that forum.” The Court first determined that the defendants had “profited from” the US market because US consumers viewed advertisements posted on the website more than 1.3 million times, and the defendants were paid by third-party advertisers based on views. The Court further concluded that the defendants had intentionally “appealed to” the US market by enabling the website to be quickly accessible to US consumers with reduced [...]

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Secondary Meaning: Consumers Connect Product with Single Anonymous Source

By on Sep 8, 2022
Posted In

Reversing and remanding a district court’s grant of summary judgment in favor of an accused trade dress infringer, the US Court of Appeals for the Ninth Circuit explained that trade dress does not need to be linked to a particular company. If consumers link the trade dress to any single (even anonymous) source or company, that is enough to constitute secondary meaning. P and P Imports LLC v. Johnson Enterprises LLC, DBA Tailgating Pros, Case Nos. 21-55013; -55323 (9th Cir. Aug. 24, 2022) (Tashima, Lee, Cardone, JJ.)

P&P makes and sells a jumbo red-white-and-blue Connect 4 game. Johnson sells a game almost identical in color, style and size. P&P sought to block Johnson from selling its game and sued for trade dress infringement under Lanham Act § 43(a) and unfair competition. During the district court proceeding, P&P’s expert submitted a consumer survey showing that most consumers associated P&P’s trade dress with a single source or company. He also submitted evidence of intentional copying and noted P&P’s advertising efforts as support for secondary meaning. The district court granted summary judgment for Johnson, ruling that P&P failed to present sufficient evidence of secondary meaning. The district court relied on the Ninth Circuit’s 2011 decision in Fleischer Studios v. A.V.E.L.A. to dismiss the survey evidence as irrelevant because the results showed a belief that P&P’s product is from a single source or company but did not show that trade dress was associated with P&P itself. P&P appealed.

The question before the Ninth Circuit was whether a manufacturer’s red-white-and-blue jumbo rendition of Connect 4 qualified as a protectable trade dress. This required the Court to determine whether P&P’s trade dress had acquired secondary meaning. Secondary meaning exists when “in the minds of the public, the primary significance of [the trade dress] is to identify the source of the product rather than the product itself.”

The Ninth Circuit concluded that the district court applied an incorrect legal standard for determining secondary meaning and that P&P presented sufficient evidence to survive summary judgment. The Court explained that many factors determine whether secondary meaning exists, including “direct consumer testimony; survey evidence; exclusivity, manner, and length of use of a mark; amount and manner of advertising; amount of sales and number of customers; established place in the market; and proof of intentional copying by the defendant.” The Court also noted that in the past it had found the presence of intentional copying and survey evidence sufficient to survive summary judgment.

Turning to the evidence presented by P&P, the Ninth Circuit explained that the district court’s analysis (which required consumers to both recognize P&P’s trade dress and be able to name P&P as the source) conflicted with the Court’s “long-established precedent[] requiring association with only a single—even anonymous—source,” and thus the district court erred by requiring evidence of specific association for secondary meaning. The Court also found strong suggestions that Johnson intentionally copied the P&P game, including the fact that Johnson conducted market research, ordered a copy of the [...]

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